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Democrats Target McConnell's Horse-Racing Tax Break

Senate Majority Targets Horse-Racing Tax Break to Pressure McConnell

Bill Clark/Roll Call
President Barack Obama has challenged Senate Minority Leader Mitch McConnell and other Republicans to support increased revenues in any debt deal.

Senate Democrats are trying to hit Minority Leader Mitch McConnell (R-Ky.) where it hurts — at the racetrack.

Sen. Jeff Merkley (D-Ore.) plans to go to the Senate floor Thursday and call for eliminating the $126 million in tax breaks for the horse-racing industry that McConnell secured in the 2008 farm bill. Democrats are dubbing it the “Bluegrass Boondoggle” and are spotlighting it as part of their broader offensive to pressure Republicans to agree to eliminate corporate tax breaks in any bipartisan debt deal.

“There should be no sacred cows, and there should be no sacred horses,” Merkley said in an interview. “This is just one example of the special favors for the well-connected that need to be reviewed as we deal with our deficit.”

Merkley rejected the argument that 
anti-tax activist Grover Norquist has made that eliminating any tax break amounts to a tax increase.

“Any sane person recognizes that these are spending programs,” Merkley said, echoing the likes of Sen. Tom Coburn (R-Okla.), who spearheaded a recent vote to eliminate an ethanol tax subsidy.

Merkley said horse racing in particular — known as the “sport of kings” — could amount to a poster child for the effort to roll back narrowly targeted subsidies.

“It’s a sport for the best-off. And why should we, in this difficult time, be subsidizing this activity for the best-off, while people are on the floor talking about cutting fundamental support for those who are hungry in America?” Merkley asked.

McConnell in 2008 took credit for authoring the tax break, which allows accelerated, three-year depreciation for racehorses. At the time, he called it an issue of fairness given the limited racing life of many horses.

“The horse industry employs 50,000 Kentuckians and contributes $3.5 billion to our economy year-round. By adding this provision to the bill, we have ensured that this important part of our farm economy is treated fairly,” McConnell said then.

More broadly, McConnell has said that eliminating tax breaks should instead be part of a larger tax reform package, and he has rejected — along with Speaker John Boehner (R-Ohio) — including any tax increases as part of a debt deal.

Democrats, meanwhile, will call for eliminating a handful of other tax breaks Thursday that they see as indefensible, including those for corporate jets, oil and gas subsidies, the carried interest tax break that benefits hedge fund managers, and deductions for the cost of shipping jobs overseas, a senior Democratic aide said.

The direct jab at McConnell comes a day after Senate Democrats held a press conference asking him why eliminating ethanol subsidies can’t be part of a debt deal even though he and 33 other Senate Republicans voted to eliminate them.

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